Deali ling wit ith Debtor/Credit itor Is Issues: Options for Busin inesses in in the Age of COVID ID-19 19 April il 20, 2020 Connecticut Bar Association Commercial l Law & Bankr kruptcy Section Hon. Julie A. Manning , Chief U.S. Bankruptcy Judge, Bridgeport Hon. Ann M. Nevins , U.S. Bankruptcy Judge, New Haven Hon. James J. Tancredi , U.S. Bankruptcy Judge, Hartford Thomas J. Sansone , Carmody Torrance Sandak & Hennessey, New Haven Irve J. Goldman , Pullman & Comley LLC, Bridgeport Jeffrey M. Sklarz , Green & Sklarz LLC, New Haven 1
Disclaimer – Remarks of f Ju Judges We truly appreciate all of our Bankruptcy Judges joining us today to provide an update concerning the operations of the Bankruptcy Courts. To the extent the any of the Judges choose to comment on issues discussed by the lawyers today, nothing they say constitute official statements by them or the Court. Nothing the Judges say today can be quoted, referenced, or otherwise cited as authority in any case or for any other reason. 2
Agenda • Status of Courts update • Bankruptcy courts are open for Business • Access issues • Emergency General Orders • Conducting hearings • Workouts in the era of COVID-19 • CARES Act loan programs • Use of CARES Act as loan facilities in bankruptcy • CARES Act and the SBRA • The influence of COVID-19 on pending cases • Effect of COVID-19 on Bankruptcy Code mandated deadlines 3
Status of Courts • The Connecticut Bankruptcy Court has continued to operate and is open for business • Hearings and Conferences that are held are proceeding telephonically • Evidentiary hearings and trials can be held and have been held by video • Video hearings are possible 4
Access to Courts • Access to the Courthouses and Clerk’s Offices is limited • In-person Court appearance are limited • Use of technology 5
General Orders Regarding Court Operations and Access to Courthouses and Clerk’s Offices 7 General Orders have entered since March 12 th • General Order Regarding Court Operations under the exigent circumstances created by COVID-19 — March 12, 2020 • Established telephonic appearance procedures • Allowed for in- person hearings as needed at Court’s discretion • Confirmed contact with Court through Courtroom Deputy email addresses • General Order Regarding Restriction on Visitors to Courthouses — March 12, 2020 • Adopted District Court Order restricting access to Courthouses is persons traveled in countries/areas infected with virus or resided with or been in close contact with someone infected 6
General Orders Regarding Court Operations and Access to Courthouses and Clerk’s Offices • General Order No. 2 Regarding Court Operations under the exigent circumstances created by COVID-19 — March 16, 2020 • Further guidance on hearing procedures • Modifications to contested matter procedures • Extensions of the Automatic Stay • Modification of procedures for deficiency notices • Chapter 13 Procedures • General Order regarding Temporary Suspension of Requirement to Obtain Debtors Original Signature — March 23, 2020 • Modification of Administrative Procedures to allow counsel to file documents requiring debtor’s signature without counsel obtaining “wet ink” version for file 7
General Orders Regarding Court Operations and Access to Courthouses and Clerk’s Offices • General Order Regarding Restrictions on Access to the Clerk’s Offices — March 26, 2020 • Procedures for manual filing of documents and manual payment of fees • Restriction on access to Clerk’s Office and public computer terminals • General Order regarding extension of deadlines in connection with Notice of Continued 341 Meetings — March 26, 2020 • General Order No. 3 Regarding Court Operations under the exigent circumstances created by COVID-19 • Further addresses telephonic appearances, Contested Matters, Extensions of the Automatic Stay, Chapter 13 Procedures, and Deficiency Notices 8
Conductin ing Hearin ings, , Conferences, , Evid identiary ry Hearin ings and Tria ials • Telephonic • Procedures Order: https://www.ctb.uscourts.gov/sites/ctb/files/Telephonic%20Vendor%20Regist ration%20Instructions.pdf • By Court Call • By Court Solutions • In Person • Video Conference 9
Workouts in the era of f COVID-19: Ju Judicial and Executive Orders Overview of Changes in State Court Practice • All notices pertaining to COVID-19 related changes in the judicial administration of cases can be found at: https://jud.ct.gov/COVID19.htm • March 12, 2020 Judicial Notice: Courts will handle only top priority cases, designated as “Priority 1 Business Functions” • “Priority 1 Business Functions” are generally criminal arraignments and those involving domestic violence, and certain juvenile, family and domestic violence matters • Modified April 15, 2020 by Judicial Notice that Operating Superior Courts are now accepting non-priority civil and family filings • Judges will rule on certain civil non-arguable short calendar matters that have been marked, take papers , starting with May 4, 2020 calendar • Arguable motions that may require a hearing will not print at this time 10
Workouts in the era of f COVID-19: Ju Judicial and Executive Orders March 19, 2020 Judicial Notice: • Immediate stay of all issued executions on evictions or ejectments through May 1, 2020 • All foreclosure sales scheduled in March, April and May rescheduled to Saturday, June 6, 2020 • Any law day set to run in March, April or May amended to provide that the first law day is now June 2, 2020 • All civil trials, trial management conferences, pre-trials, status conferences, J-ADR mediations and short calendars both arguable and non-arguable, are cancelled as long as Judicial Branch operations are limited to “Priority 1 Business Functions” 11
Workouts in the era of f COVID-19: Ju Judicial and Executive Orders March 24, 2020 Judicial Notice of Suspended and Amended Practice Book Rules: Among those Rules that would be of particular relevance to enforcement of creditors’ rights by civil action are: • Sec. 3-2. Time To File Appearance. Appearances must be filed within two days of the return day to avoid the filing of a Motion for Default for Failure to Appear. This requirement is suspended as no default orders are issuing at this time. • Sec. 11-14. – Short Calendar; Frequency; Time; Lists This section requires short calendar to be held at least once a month. The Judicial Branch does not expect to be able to comply with this (appears to have been superseded by April 15 Notice) • Sec. 17-30 (a) and (b). – Summary Process; Default and Judgment for Failure To Appear or Plead. There will be no enforcements of defaults for a summary process defendant’s failure to appear or failure to plead, which would otherwise be required within two days of the return date. 12
Workouts in the era of f COVID-19: Ju Judicial and Executive Orders March 30, 2020 Judicial Notice Re: Civil Scheduling Agreements and Case Management Orders: • Civil Scheduling Agreements and Case Management Orders are suspended until Judicial Branch operations are fully restored. 13
Workouts in the era of f COVID-19: Ju Judicial and Executive Orders Executive Orders • can be found at: https://portal.ct.gov/Office-of-the-Governor/Governors- Actions/Executive-Orders/Governor-Lamonts-Executive-Orders • EO No. 7D (3/16/20): Limits restaurant, bar, and private club operations to off-premise consumption of food and non-alcoholic beverages; Closure of off-track betting facility operations; and Closure of gym, sports, fitness, recreation facilities, and movie theaters. • EO No. 7H (3/20/20): "Stay Safe, Stay Home" restrictions on all workplaces for non-essential business – requires reduction of in-person workforces at any location by 100% and applies through 4/22/20 (likely to be extended). • EO No. 7T (4/2/20): Provision of non-essential lodging prohibited • EO No. 7X: For residential renters, prohibits service of notice to quit or service of summary process before July 1, 2020, and provides grace period of 60 days for April and May rent. 14
Workouts in the era of f COVID-19: Ju Judicial and Executive Orders March 31 st Agreement with Banks and Credit Unions on Residential Mortgages • 90-day grace period for all mortgage payments • Relief from fees and charges for 90 days • No new foreclosures for 60 days • No credit score changes • Agreement does not apply to commercial mortgages, but advises that commercial mortgage borrowers “should know that all financial institutions are working proactively with each commercial borrower experiencing challenges” and that any “commercial customer having financial difficulty … should call their financial institution as soon as possible.” • Further description of the Agreement and a list of participating banks can be found on the CT Dept. of Banking website at https://portal.ct.gov/DOB/Consumer/Consumer-Help/COVID-19-Mortgage-Relief 15
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